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Past Issue • Apr-Jun 2016

Affordability and Accessibility to Medicines in EMs: Differential pricing is the solution

Differential pricing by pharmaceutical companies whereby prices charged in each country are commensurate with either its ability to pay or with its average per capita income, could be a solution to improving affordability and accessibility to medicines in emerging markets such as India where most patients pay out-of-pocket. Price discrimination offers more affordable prices to customers with lower ability/willingness to pay, thereby increasing their access and revenues for companies.
India’s generics industry is a huge success story, generating major revenues in global markets and providing India’s population with inexpensive medicines. Its business model has thrived on the small molecule (chemical) drugs for mass diseases that were developed by multinational companies (MNCs) in the 1980s and 1990s. As these drugs lost patent protection over the last few decades, billions of dollars of sales were genericised, particularly in the US, where regulatory and reimbursement regimes are favorable to generics and over 80% of all prescriptions are now generically dispensed.

ABOUT THE AUTHORS

  • Patricia-M-Danzon

    Patricia M Danzon

    Patricia M Danzon is the Celia Moh Professor of Health Care Management at The Wharton School, University of Pennsylvania and a visiting professor at the Indian School of Business (ISB). Her research interests include biopharmaceuticals, health care, industrial organisation, insurance, liability, medical malpractice.
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